Knowledge Transfer in Agriculture and Rural Development: Public Disclosure Authorized Four Western European and North American Case Studies

-Pon 24030 ECSSD Environmentally and Socially Sustainable Development The World Bank Working Paper No. 34 Public Disclosure Authorized December 3, 2001 Public Disclosure Authorized Knowledge Transfer in Agriculture and Rural Development: Public Disclosure Authorized Four Western European and North American Case Studies A Joint ECSSD - Policy Development Publication Public Disclosure Authorized A Study by Aron P. Goldman The ECSSD unit distributes this technical report to disseminate findings of work in progress and to encourage the exchange of ideas among IBank staff and all others interested in development issues. This paper carries the name of the author and should be used and cited accordingly. The findings, interpretations and conclusions are the author's own and should not be attributed to the World Bank, its Board of Directors, its management, or any member countries. Knowledge Transfer in Agriculture and Rural Development: Case Studies in Western Europe and North America Aron P. Goldman, Policy Development December, 2001 Abstract EU accession countries, as they start to look more like their Western European neighbors, are considering new priorities for agriculture and rural development. New inputs for this priority-setting process derive from four case studies which consider the implications of the knowledge economy for agriculture and rural development in Western Europe and North America. The studies are from Ballyhoura (Ireland), Extremadura (Spain), Umbria (Italy), and Mississippi (United States). There have been successes and failures, and no unambiguous process of knowledge transfer is found everywhere. However, the study of these four cases yields lessons that may be widely useful: * Technology and knowledge-driven industries considered for adoption should be commensurate with the local level of development. * Technology and services should be used to (a) add value to existing agricultural products; (b) establish higher-value agricultural alternatives, or (c) establish non- agricultural alternatives. * Planning for expansion of technology- or knowledge-based activities should be sensitive to effects on the environment, the quality of work, and other aspects of the quality of life. Page 1 of 25 L Introduction Background This working paper is the result of a partnership between The World Bank and Policy Development (PD). The World Bank's Environmentally and Socially Sustainable Development Sector (ECSSD) in the Europe and Central Asia Region is considering the implications of the knowledge economy for agriculture and rural development among applicants for accession to the European Union (EU). As the economies of the accession countries begin to converge with those of their Western European neighbors, knowledge about what works and what doesn't in those economies is ever more relevant. To support its clients among the accession countries, ECSSD asked PD to gather and analyze some of the experiences of knowledge transfer in agriculture and rural development in Western Europe and North America. ECSSD and PD hope that this research will provide useful input as the EU accession countries set their agriculture and rural development agendas. Findings Our investigation of knowledge transfer in rural development in four regions revealed a multitude of activities that seemed to follow no single principle, or set of principles. Indeed, the paths followed were so diverse that it is not even clear how to judge the success or failure of these initiatives. The summary table below (Table 1) demonstrates the diversity of our cases. Each of the four cases - Ballyhoura (Ireland), Extremadura (Spain), Umbria (Italy) and Mississippi (United States) has distinct initial conditions and undertook a unique developmental approach. Rewards and Risks of Globalizadon Characterized by economist Samuel Bowles as "a reduction of impediments to international flows of goods and factors of production," globalization is the essential context in which knowledge transfer in rural Western Europe and North America has taken place. "Virtual call centers"' in Ireland, globalization of truffle exports from Italy, and international tourism in rural Spain would not be feasible without the recent advances in global communication, transportation, and technology. In these cases, minimal investments in knowledge transfer have led to unprecedented opportunities for growth. At the same time, globalization is linked to the withdrawal of agricultural subsidies. For many communities, the event precipitating experimentation with alternative activities has been the reining-in of agricultural subsidies; the United States Farm Bill, the Common Agriculture Policy (CAP), and Mexico's Alianza Para el Campo (Alliance for the Countryside) are all being modified to conform to WTO and NAFTA rules. The urgency of technology and knowledge-based structural changes to agriculture and rural development in Western Europe and North America cannot be fully explained without proper emphasis on the pressures due to dwindling price supports, input supports, and Page 2 of 25 export promotion. Moreover, some see globalization as a potential threat to social welfare. Our research revealed cultural discomfort with the shift away from traditional agricultural activities that took place under some initiatives. For example, traditional truffle gatherers in Italy expressed concern that they are required to harvest only on the processor-owned tree farms, on an hourly-wage basis. Table 1 Initial Development Status Approach Short Term Results Long Term Results The region is sparsely In general, IT and new Residents have begun populated with sma'l, Ballyhoura entrepreneurial ideas to find niche t primitive fanns. Computers emphasized higher were foreign to agricultural activities, g and internet technology were value commodities, residents. Traditions exploit tourism c very rare and unfanmiliar to adding value, seemed too deeply potential, and S residents. No tourism. service sectors, and ingrained to allow for develop IT X Declining EU subsidies. IT solutions. adaptation. enterprises. The long-term prospects are good. Landlocked, rural, and Extremadura Leadership in markets It is not clear whether historically dependent on emphasized for cherries and enough " cherry production. Little or expanding cherfy cherry products has diversification has X no IT or biotech in use. production, but also been maintained, taken place. The g Minimal tourism. Declining diversified into region may be partly E EU subsidies. processing and new relying on product marketing. monopolization for continued market dominance. Sparsely populated, primitive One corporation has Increased production Tedious factory Y agricultural methods, expanded and sales. processing jobs minimal tourism. Declining production using threaten to replace a EU subsidies. new technologies. traditional, independent gathering. Poverty, large farms, high Low Value Technical success. Implementation subsidies, research extension Production disaster. .1 services infrastructure. enhancements. t Declining federal subsidies. Methodology Sources This qualitative survey was conducted using primary and secondary sources. Primary sources included community members, both participants and non-participants in the rural development initiatives under study. Secondary sources included scholarly and mainstream literature and interviews with regional experts as well as academic experts and practitioners in knowledge transfer and rural development. Dozens of interviews were also conducted with international funding agencies such as the EU, the OECD, the Page 3 of 25 World Bank, and the local companies and agencies operating the local development projects, including Ballyhoura Development and Urbani. Definitions There are many interpretations of "knowledge transfer." In a narrow interpretation, it sometimes refers to the activities of agencies specifically established with "knowledge transfer" as their mandate. This may include agricultural extension services at publicly funded universities as well as activities of other publicly funded agencies. These services were established specifically to help ensure the transfer of technology and pure research to applications within the economy. In a broader interpretation, knowledge transfer may refer to the local adaptation of knowledge from outside the community, regardless of its source or by what means it arrived. For example, the adoption of information technology in a rural village previously unexposed to technology would be "knowledge transfer" in this sense. For the purposes of this exploratory study, all definitions of knowledge transfer were acceptable. This decision was made early on because it allowed us to learn more about - rather than determine - how communities and experts are thinking about this concept. The examples we researched, therefore, reflect a variety of interpretations. Case Studies Agriculture. In each rural development case study, we looked for innovations in agricultural cultivation, harvesting, and processing technology involving computers, mathematical modeling, genetic modification, and marketing. We also looked for the means by which the knowledge transfer took place. Was it a deliberate and formal transfer facilitated by a government agency responsible for such activities? Or was there a private market response by individual investors or a company? Tourism. We quickly learned that tourism has proved a popular alternative to agriculture, and observed that development of tourism involved knowledge

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